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Accountants help you keep an eye on major costs as early as the
startup stage, a time when you're probably preoccupied with
counting every paper clip and postage stamp. Accountants help you
look at the big picture.

In fact, perhaps no other business relationship has such
potential to pay off. Nowadays, accountants are more than just
bean counters. A good accountant can be your company's financial
partner for life -- with intimate knowledge of everything from
how you're going to finance your next forklift to how you're
going to finance your daughter's college education.

A general accounting practice covers four basic areas of
expertise:

Business advisory services

Accounting and record-keeping

Tax advice

Auditing

These four disciplines often overlap. For instance, if your
accountant is helping you prepare the financial statements you
need for a loan, and he or she gives you some insights into how
certain estimates could be recalculated to get a more favorable
review, the accountant is crossing the line from auditing into
business advisory services.

The best way to find a good accountant is to get a referral from
your attorney, your banker or a business colleague in the same
industry. Don't underestimate the importance of a CPA (certified
public accountant). This title is only awarded to people who have
passed a rigorous two-day, nationally standardized test.

The first step in setting the stage for a successful search is to
take an inventory of what you will need. Given the level of fees
you are prepared to pay, you must decide where your
responsibility stops and where the accountant's begins.

Once you have compiled your documentation and given some thought
to your expectations, you're ready to interview your referrals.
Five candidates is a good number to start with. For each
candidate, plan on two meetings before making your decision. One
of these meetings should be at your site; one should be at
theirs. Both parties need to know the environment the other works
in.

During the ensuing interviews, your principal goal is to find out
about three things:

Services
Most accounting firms offer tax and auditing services. But what
about bookkeeping? Management consulting? Estate planning? Will
the accountant help you design and implement financial
information systems? Other services a CPA may offer include
analyzing transactions for loans and financing; preparing,
auditing, reviewing and compiling financial statements; managing
investments; and representing you before tax authorities.

Although smaller accounting firms are generally a better bet for
entrepreneurs, they may not offer all these services. Make sure
the firm has what you need. In addition to services, make sure
the firm has experience with small business and with your
industry.

Personality
Is the accountant's style compatible with yours? Be sure the
people you are meeting with are the same ones who will be
handling your business. At many accounting firms, some partners
handle sales and new business, then pass the actual account work
on to others.

When evaluating competency and compatibility, ask candidates how
they would handle situations relevant to you. For example: How
would you handle an IRS office audit seeking verification of
automobile expenses? Listen to the answers, and decide if that's
how you would like your affairs to be handled. Realize, too, that
having an accountant who takes a different approach can be a good
thing. Be sure that the accountant won't pressure you into doing
things you aren't comfortable with. It's your money, and you need
to be able to sleep at night.

Fees
Ask about fees upfront. Most accounting firms charge by the hour;
fees can range from $100 to $275 per hour. However, there are
some accountants who work on a monthly retainer. Figure out what
services you are likely to need and which option will be more
cost-effective for you. Get a range of quotes from different
accountants.

Try to get an estimate of the total annual charges based on the
services you have discussed. Don't base your decision solely on
cost, however; an accountant who charges more by the hour is
likely to be more experienced and thus able to work faster than a
novice who charges less. At the end of the interview, ask for
references -- particularly from clients in the same industry as
you.

After you have made your choice, spell out the terms of the
agreement in an "engagement letter" that details the returns and
statements to be prepared and the fees to be charged. This
ensures you and your accountant have the same expectations and
helps prevent misunderstandings and hard feelings.

Make the most of the accounting relationship by doing your part.
Don't hand your accountant a shoebox full of receipts. The better
you maintain your records, the less time your accountant has to
spend -- and the lower your fees will be.

It's a good idea to meet with your accountant every month. Review
financial statements and go over any problems so you know where
your money is going. This is where your accountant should go
beyond number-crunching to suggest alternative ways of cutting
costs and act as a sounding board for any ideas or questions you
have.

A good accountant can help your business in ways you never
dreamed possible. Spending the time to find the right accountant
-- and taking advantage of the advice he or she has to offer --
is one of the best things you can do to help your business soar.